Wednesday, 26 May 2010

It's Wednesday - it must be Italy

No doubt Portugal's turn will come by the end of the week, but the early morning financial gloom today is centred on Italy. Hatfield Girl is the expert on the ancient peninsula, but I can't help wondering if all the old internal tensions - between North and South, communist and fascist, rich and poor, church and tavern - will start to bubble away again. And if they do, will this be wholly a bad thing?

It's a long time now since Garibaldi awakened in Italians an identity other than Piedmontese, Calabrian, Sicilian or Tuscan, slightly longer even than since Bismark used the customs union to create a German identity from a mash of princeling statelets. The EU, of course, has adopted exactly the tactics used for German unification, with a pan European Zollverein that created the need for a pan European currency that would lead to a pan European Chancellorship. But this time it hasn't played out with an acclamation in the Hall of Mirrors, but with Europe's people bubbling angrily away and the IMF at the door.

In the 19th century, folk learned to be less Piedmontese and more Italian, less Bavarian and more German. And we know where that got us. So when the EU wants us to be less British, less Italian, less German and more European they think they're pulling the same trick. Except that the peoples of Europe are now comfortable with their nationality and less willing to lose it. The slow death of the Euro will hit us all hard, but from that crucible may re-emerge across the Continent a popular fire and passion for democracy that has been lost in a Mogadon syrup of social democratic consensus these part forty years.

5 comments:

Budgie
said...

One of the EU's tricks is to enhance the regions with the deliberate aim of breaking the nation. It has failed within England (so far) but succeeded in the UK. From what you say it has worked in dismantling Italy.

That is a shame for I have enjoyed visiting Italy. Yet I have noticed that it has got less, well, Italian, over the years, showing the EU's baleful influence. This gives the lie to the europhiles' opinion that to be anti EU is to be anti European. The truth is that the EU is anti European. It has to be, otherwise it will not win.

Am I right (sic) in thinking that the PIIGS countries all have socialist governments, that massively overspend money they don't own, just like our last Labour wonks? I think the trouble that the Euro is in, is because simple home-economics doesn't apply to socialist governments. What gave these countries the notion that they could spend beyond their means??

According to the Daily Comic (Mail) "Research from economists at The Royal Bank of Scotland showed the three stricken eurozone countries, Spain, Greece and Portugal, have issued public and private debt worth €2.16trillion (£1.9trillion) - or 22pc of the region's gross domestic product - to foreign banks, pension funds and insurers.

Spain has emerged as a particularly acute concern, given the large size of its economy and the painful impact of the deflation of its property and construction bubble. Some €1.49trillion of Spanish debt is held by overseas institutions, RBS calculated."

And how much of our own £1.4 trillion+ debt is owned by foreign financial institutions? And the US official $14tn?

Mind you this is all dwarfed by the scale of the derivatives held by the Federal Reserve which amounts to over £200 trillion. It was in their quarterly accounts published last month. And we think we have problems!!

Global GDP is just over $60tn according to the World Bank so how could any of it be paid off? The whole world has been living beyond it's means and is completely bankrupt.

It's rather sweet of you, Anon 11.21, to regard Silvio Berlusconi's government as socialist. And, to be fair, Greece's left of centre government is relatively newly elected; it was the right of centre regime that did most of the damage, including producing the fake government statistics. The european Union left of centre governments are Greece, Austria, Spain, Portugal and, until last week, the United Kingdom. Italy's debt is public debt, its private debt is small, and restraining tax evasion alone will probably be enough to bring Italy within EU guidelines by 2012. Dr Tremonti and Dr Draghi have been keeping an iron grasp on Italy's finances and Mr Berlusconi leaves them to it, wisely; when he tells us there isn't need for tax rises or major cuts he's probably right, he's many things but not a congenital liar.hg

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